MEMS & Sensors

Yole Développement (Yole) expects the automotive sensor market to more than double in value from $11B in 2016 to almost $24B in 2022. Only 10% of that is thanks to the growth of the car industry. The other 90% arises from autonomous driving, which we expected will be adopted in the next three years, and then see some autonomous functions diffuse into most cars.

Such growth also changes the ranking of how important sensors are in the car. Until now, the most important sensors in the cars were pressure sensors, ultrasonic sensors and magnetic sensors. The first evolution has been radar systems, which became the highest-volume group of sensors used in cars in 2016. But starting in 2018, image sensors will become more important, with a compound annual growth rate (CAGR) exceeding 26% to reach a $7.7B market value in 2022, when the radar market will be worth $6.2B. Ultrasonic sensors’ 9% CAGR will see their market value reach $3.2B by that point. Other traditional sensors will grow more slowly, with CAGRs from 1% to 3%, but this is still very significant compared to the growth of the automotive industry.

The other sensor that will take most benefit from autonomous driving is Lidar. Today the automotive Lidar market is around $200M, with an expected 36% CAGR over the next five years seeing it reach $1.4B in 2022. Reliable Lidar for automotive applications currently costs $4000, limiting its first applications to semi-autonomous fleet management where savings can deliver a sufficient return on the high investment.

The adoption of the new sensors also brings in new manufacturers. The market for pressure sensors and magnetic sensors was previously dominated by companies including Denso, Bosch, Allegro, TDK, and Sensata. The new fast growth applications are dominated by Infineon, STMicroelectronics and NXP in radar and ON Semiconductor, Omnivision and Panasonic in image sensors. The tier one suppliers to carmakers remain mostly unchanged, but the sensor manufacturer landscape is shifting.

The other big trend in the automotive industry is the electrification of cars, but its impact on sensor growth is more limited. Electrification mainly calls on magnetic and current sensors, which are already well-established in the automotive industry, with low prices compared to radar or Lidar. But these limitations only slightly restrict the trend’s impact. We expect 14M electric/hybrid vehicles to be sold in 2022 and more than 25M in 2027. The management of electric motors, batteries and power modules will therefore provide an important second growth engine for the automotive sensor industry.

All the sensor players are currently waiting for the announcement of the new iPhone 8 and its amazing 3D sensors for depth sensing, as described in Yole’s 3D Imaging and Sensing 2017 report. Yet the automotive industry is expecting growth rates that are almost comparable to consumer electronics. In a global automotive market worth than US$2.3T, the little world of automotive sensors has been shaken up by the emergence of electric and autonomous cars. Despite just 3% growth in the volume of cars sold expected through to 2022, Yole expects a sensor sales volume CAGR above 8% over the next five years, and above 14% in sales value. The automotive industry is back – as a new electronic device!

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